Here’s Why Hyderabad Should Not Be Made A Union Territory

Posted on September 15, 2013 in Politics

By Harsh Vasani:

On the 31st of July, the Congress Working Committee (CWC) finally agreed to re-initiate the process of the bifurcation of Andhra Pradesh, thereby bringing an end to the five decades of agitation by the people of Telangana. What followed can be best described as a political mayhem. The incumbent Chief Minister who is vehemently against the bifurcation was rumoured to float a new political party. Meanwhile Seemandhra (the other two regions of Andhra Pradesh- Rayalseema and Coastal Andhra) erupted in vehement opposition to the bifurcation and continued to protest.


In the events that followed, news reports emerged that the Congress high command considered declaring Hyderabad as a Union Territory (U.T), whereby it will be a shared capital for 10 years. Following this, both the new states (Telangana and Seemandhra) need to shift to their new capitals and Hyderabad will fall under Federal administration.

Other than being a shrewd political move to pacify the ‘integrationists’ from Seemandhra, it is also gross injustice to the people of Telangana and Hyderabad. Right from the genesis of the movement for the Telangana statehood, Hyderabad has been an integral part of the demand; to exclude the city from the new state serves no long term purpose to anyone.

There are other aspects too which illustrate the non-feasibility of Hyderabad as a U.T.

The need for a new state capital for Telangana, if Hyderabad is made a Union Territory, will involve huge investment by the central government, which will go up to lakhs of crores. It’ll just be an additional burden on the central revenue, all of which can be easily avoided. According to a Times of India report, 55% of the A.P government’s revenue generated is from Hyderabad and 65% of the Central government’s revenue from A.P comes from Hyderabad -this shows the economic capability and independence of Hyderabad. Declaring Hyderabad as a Union Territory may cripple the investments. Akin to Delhi, Hyderabad may also face water and electricity shortages. Hyderabad does not have a power station dedicated to it, nor does it independently have access to Krishna or Godavari rivers. In this scenario it may have to buy electricity from neighbouring states and can have problems regarding water sharing.

Contrary to the popular belief, a U.T won’t bring along any tax relaxation. Union Territories normally adapt the tax structures and tax acts of neighbouring state(s). The local and the central taxes remain the same in a U.T; VAT and Excise duty are not abolished. Other than economic aspects, there are strong political, social and cultural links between the city of Hyderabad and the Telangana region. The city is also home to scores of Muslims who have a distinct political identity. The regional Majlis-E-Itehadul-Ul-Muslimeen (MIM) party has a strong hold over the cities’ Muslims and command their loyalty. Declaring Hyderabad as a Union Territory would infringe upon their political representation. A federally administered Hyderabad may also give rise to communalism with little political representation at state level to check the saffron brigade. One of the most important factors that have led to the demands of the bifurcation is the neglect the region has been witnessing by successive governments. With Telangana as a separate state, the Telanganites hope for an end to the plight of farmers and emancipation of the agrarian crisis. If Hyderabad is declared a U.T., a substantial loss of revenue and increased expenditure would erode all such hopes.

With its renewed vigour in favour of bifurcation, the Congress has managed to achieve some goodwill in Telangana- albeit at the cost of its image/aspirations in Seemandhra- it would do well to not score a self goal by making Hyderabad a Union Territory.